General Motors Zombie Watch 10: Fritz Henderson Must, Uh, Go

Robert Farago
by Robert Farago

So how long before New GM fires Uncle Fritz? In the most pragmatic of all possible worlds, where the Presidential Task Force on Automobiles (PTFOA) looked out for the taxpayers’ $50 billion as if it were their own—Fritz wouldn’t even BE GM’s CEO. Henderson would have been defenestrated along with Rick Wagoner. You know: the ex-CEO who groomed Henderson as his replacement. (How hard is it to connect those dots?) Henderson has assured his place in The Peter Principle Hall of Fame, capping his career as the PTFOA’s toady. And now, best case, he should follow Old GM onto the scrap heap of history. Not a chance.

The fact that Henderson wasn’t terminated with extreme prejudice the moment the United States government assumed complete control of General Motors tells us that Uncle Fritz is no Richard Nixon; the PTFOA will have Henderson to kick around some more. I repeat: the man’s a patsy.

Fritz didn’t decide to kill thousands of GM dealers. Fritz didn’t decide which GM brands to keep. Why would he? They’re family. White collar cull? Heaven forfend! We’ll use attrition. Mr. Henderson, it’s Congressman Barney Frank on the other line, asking for a stay of execution for a GM parts distribution facility in his constituency. Mary, why didn’t you forward this to the PTFOA? If I told you once—Barney! Hi! What’s that? I’ll check. Rest assured, I feel your pain. [Joke deleted].

Anyone harboring illusions that Uncle Fritz is large and in charge should note: Henderson didn’t take the stand and tell federal bankruptcy court that New GM had to be created by July 10—or die. It was Harry J. Wilson, a heretofore unknown member of the PTFOA. “We have no intention to further fund this company if the sale order is not entered by July 10,” Mr. Wilson told Judge Gerber. “It’s better to cut one’s losses.”

One’s losses? Hey Bub, those are MY losses you’re talking about. Anyway, who talks like that? Not Uncle Fritz. In fact, let’s pay a little attention to the man behind the curtain . . .

“Prior to joining Silver Point in 2003, Mr. Wilson was a principal in the private equity business at The Blackstone Group, where he completed a number of private equity investments and leveraged buyouts,” reports. “Mr. Wilson began his career in the Investment Banking Division at Goldman, Sachs & Co., where he worked in the Energy & Power group on a range of merger and corporate finance transactions.”

Hang on; the same Blackstone Group that competed with Cerberus to buy Chrysler? Yup. Although my wife destroyed my tin foil hat whilst heating-up some chicken nuggets, it’s clear that’s a cabal of investment bankers—led by Steve Rattner and Ron Bloom—are deciding the fate of the artist known as the world’s largest automaker. While Barack Obama has publicly stated his intention to “let GM run GM” [presidential paraphrasing], nothing could be further from the truth. Uncle Fritz is so not The Man.

So why keep him around? First, remember that the general public couldn’t give a damn who’s running GM. In fact, they’ve never heard of Uncle Fritz. If they see him on the tube, well, he looks nice. Avuncular. Credible. Non-threatening. So why not?

Second, as GM’s former CFO, Henderson is an excellent pencil pusher. If you were a member of the PTFOA and wanted to grab some numbers upon which to base your otherwise uninformed decisions about the automaker’s fate, Henderson’s the go-to guy. He couldn’t save GM if his life depended on it, but Uncle Fritz knows his onions.

Most importantly of all, Fritz is a terrific fall guy. If/when GM’s NA sales fall [further] into the trash, the PTFOA can throw Henderson on the pyre. The President has taken new steps to put General Motors on the path to profitability; a management shake-up is on its way!

The PTFOA should, of course, dump Henderson now. What better way to celebrate New GM’s birth, to draw a line under Old Skanky GM, than offing the bureaucratic bumbler who helped bring The General to the brink in the first place? Passing the torch PR, and all that.

Yes, well, who would replace Uncle Fritz?

As TTAC’s Ken Elias has pointed out, there are only a handful of auto executives capable of running GM, even in its truncated form. The number who could turn the ailing American automaker around is even smaller. And none of these talents is likely to do so for $500,000: the salary cap dictated by Congress for TARP (Troubled Asset Relief Program) recipients. Also, any CEO who’d take on the job (for real) would want independence from the PTFOA. And the PTFOA can’t have that, now can they?

So Uncle Fritz will soldier on. Or not. Either way, GM is unlikely to receive the one thing it needs to survive: leadership.

Robert Farago
Robert Farago

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2 of 18 comments
  • EquusMAximus EquusMAximus on Jul 10, 2009

    I got stuck with a Chevy Cobalt last week for a 2,200 mile drive to Florida. Handled poorly, trip odometer only goes to 999 miles, I guess an extra digit was too much cost. My drink nearly melted in the cup holder due to poor insulation under the carpet, Distance to Empty counts down your tank, but when it gets to 50 miles, it only tells you to get fuel, guess you are on your own guessing how many miles are left. What idiot designer thought this was a great idea? Air Conditioning totally inadequate for Florida temps and humidity. A TOTAL piece of junk, still marketed under improved quality....who do they think they are fooling? How do you give away 30% of your market share? By building junk, and only improving your marketing. GM STILL produces some of the worst crap on the market. If I'm going to spend $20-30k for a car, I want the best value for my expenditure, and that's not with a company like GM. GM has perfected putting lipstick on a pig.

  • Maverick Maverick on Jul 12, 2009

    GM needs a change agent. Whether or not Fritz Henderson is that person remains to be seen. However, if the PTFOA saw a better guy, I'm pretty sure that they would have brought that person in. Also, I think that separating the CEO role from the Chairman title was a very good call. Say what you will about PTFOA and the whole idea of the bailout, I think PTFOA got most of it right. They were pretty brutal in their assessment of GM and held tight to forcing GM to make the tough decisions that have languished for years. The New GM is now on its own to make this work. My sense is that Henderson is a change agent. Could there have been better choices? Perhaps. Should he clear out the executive ranks? Absolutely. Does he need new blood? Yes. Remember, however, that the fish stinks from the head down. Deming said that management is 85% of the problem. With a good CEO things can fall into place. I would have liked to see Henderson introduce the New GM on Friday with a bevy of changes to really set the tone. That didn't happen. We'll see very soon if GM is going to be faster-greener-leaner-smarter or just more of the same.

  • FreedMike I like the looks of the Z, but I'd take the Mustang. V8s are a disappearing breed.
  • Picard234 I can just smell the clove cigarettes and the "oregano" from the interior. Absolutely no dice at any price.
  • Dartdude The Europeans don't understand the American market. That is why they are small players here. Chrysler Group is going to die pretty soon under their control. Europeans have a sense of superiority over Americans that is why the Mercedes merger didn't work out and almost killed Chrysler. Bringing European managers aren't going to help. Just like F1 they want our money. We need Elon Musk to buy out Chrysler, Dodge and Ram from Stellantis.
  • Michael S6 I would take the Mustang for the soundtrack. However, practically a BMW M340ix or M240ix would be my choice.
  • Michael S6 Took my car for oil change on Friday and dealership was working on paper. Recently one of the major health care system in our area was hacked and they had to use paper backup for three weeks. What a nightmare.